TBP extends mail order arm

The Book People's (TBP) mail order business has outperformed its direct sales activity in both sales and profitability for the first time, the company has revealed.

Half of its gross sales of £60m—before paying £10m to third party sales agents—were said to have derived from the mail order business in the year to end-December 2000. The unit has grown from £5m sales in just five years.

A pretax loss of £387,621, compared to profit of £837,309 the previous year, was blamed on increased investment in the division. The company spent £2m on its mail order database; the sum was taken as a direct hit in distribution costs. It also suffered from costs associated with a legal dispute with Carlton Books (see right).

"The revenue generated from the investment will be tremendous—our mailing list is now extremely healthy," Ted Smart, TBP chairman, said. "We have broadened the distribution of our catalogue to a very large area." A single mailshot of 22 million catalogues was sent out during 2001.

The rise in mail order sales had improved commercial relationships with publishers by enabling the company to offer a wider range of titles, Mr Smart said. Firm sale agreements also helped to improve terms: TBP sells selected titles at up to 75% discount.

The company's direct sales arm was said to be keeping pace with the growth. Gross sales are expected to top £70m this year. A third call centre and warehouse are to be opened in 2002, probably in Wales. TBP took on extra work in September when it signed up to run off-the-page sales for News International and Associated Newspapers after previous supplier BVCD collapsed.

Reported turnover for the year increased by 11.3% to £49.6m, of which 97% was generated in the UK. The remainder was made in the Republic of Ireland. Operating losses reached £244,461.